Markets extended their losing streak on Tuesday despite an early rally, and the S&P 500 closed at its lowest level since November 2020 as concerns loomed over a global recession and monetary policy.
The S&P fell 0.2% to 3,647, while the Dow Jones Industrial Average fell 0.42%, about 120 points and the heavy Nasdaq Composite jumped 0.25%.
The drop comes despite the Dow jumping as much as 350 points in early trading and the index dropping as much as 330 points on Monday.
Among the top performers in the market were energy companies Shell and Exxon Mobil, up 2.7% and 2.1%, respectively, as gasoline and crude oil prices rose domestically, while food and restaurant stocks fell, with shares of Keurig Dr. Pepper, Coca-Cola, and McDonald’s. The fall is more than 2%.
The British pound recovered on Tuesday after falling to a record low of $1,035 early Monday, rising to $1.07, while the two-year US Treasury yields 4.3% and 10 years 3.98%.
Analysts remain concerned that the worst is yet to come for stocks: Market volatility is “extremely high” and the S&P could drop as much as 17% to 3,027, analysts wrote in a Sevens Tom Essaye report in a Tuesday note. Recent trading, the lowest since early 2020.
JPMorgan issued a similar warning in a note on Monday, predicting the S&P could reach between 3,000 and 3,400 in late 2022 or early 2023.
Keith Lerner, chief market strategist at Truist Advisory Services, wrote in a note Tuesday that now is not “the time to be increasingly cautious,” noting that long-term returns remain positive and that “investors are only investing for longer periods of time than the next several months.” .”
New home sales data released early Tuesday by the Census Administration far exceeded analyst estimates even as new home prices fell. Suffolk Construction CEO John Fish said in a statement that volatility in the housing market could be “an indication that we are in the early stages of a recession”.
Recession watch: A ‘very worrying’ sign of a serious economic slowdown emerges as the stock market crashes (Forbes)
Housing market volatility flashes ‘early signs’ of recession as new home sales unexpectedly rise (Forbes)